Eutelsat files arbitration claim against Mexico

The case centres on a claim that in the early part of this year the Mexican government specifically reserved Eutelsat Americas satellite capacity without payment, and that Eutelsat is being further penalised.  In reality, the capacity has allegedly been “reserved” by Mexico’s government for some years, but without payment.

The argument is being heard before the International Centre for Settlement of Investment Disputes, a service from the World Bank in the US, and where Eutelsat is represented by a highly-regarded Washington law practice, Jones Day.

Eutelsat is asking that Mexico observe a Mexico-France Reciprocal Investment Protection Treaty signed by the two nations in 1998.

Former Eutelsat Americas CEO Patricio Northland argued that that there was not fair dealing between Mexico and Eutelsat. “We consider that the authorities must be fair in their dealings. We feel that there is a negative perception by the authorities,” Northland told Mediatelecom, back in May 2016. “Only in the Eutelsat 113 West A (formerly Satmex 6) satellite we are asked for more than 131 MHz of available spectrum and for other two satellites in operation, relatively similar capacities are required. In total, we must have 363 MHz reserved, about seven percent of our capacity,” he added.

Eutelsat has already asked the Mexican government for “fair treatment” in terms of satellite regulation, and this follows on from Eutelsat’s acquisition of the ‘SatMex’ business in early 2014. Hector Fortis, who looks after Regulatory & International Affairs at Eutelsat, is quoted by Mexico’s El Universal newspaper as saying that new regulations need to be drawn so that there is fair competition between domestic and foreign businesses.

Several senior executives, including Michael de Rosen, the former CEO, have reportedly visited Mexico to specifically lobby with the authorities over this claimed unfair treatment.

Currently, ‘international’ satellites – which number more than 50, says Fortis –  must supply up to 8 MHz of capacity to Mexico free of charges. Eutelsat Americas must offer much more, hence the arbitration demand.

Eutelsat says that normally governments frequently request capacity but always pay for it.

Eutelsat is asking that the current Satellite Communications Regulations issued by Mexico be updated and modified.

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